SoftBank is banking on an Indian startup.

Why SoftBank made a big bet on an Indian bank-tech startup

Protocol Fintech

Hello and welcome to Protocol | Fintech! This Tuesday: An Indian startup looking to disrupt banking technology, Maxine Waters' worries about SPACs, and the key to stopping money launderers.

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The Big Story

Disrupting bank tech

Indian startup Zeta just raised a stunning $250 million in a series C round led by SoftBank. It highlights a key trend in financial services: Banks are tired of their aging tech and want newer, faster, better software.

Zeta, which provides infrastructure technology for a host of banking services, including credit-card processing and mobile banking, is now valued at $1.45 billion. That's a fourfold increase from two years ago, which underlines heightened investor interest in this space.

As consumers go mobile, banks want to move away from antiquated systems. Founded just six years ago, Zeta says it now serves 10 banks and 25 fintechs in eight countries.

  • The company plans to use the funding for a bold expansion in Europe and the U.S. where demand for banking software has been accelerating, especially during the pandemic.
  • Banking software is a $300 billion industry, according to Munish Varma, managing partner at SoftBank Investment Advisers. But "most banks still employ technology which is significantly older than their customers," he said in a statement.
  • Zeta CEO Bhavin Turakhia said banks have been "slow to innovate" and still use "decades-old software built at a time when mainframes and Cobol were in vogue."
  • In fact, banks are so "behind the curve" that around 80% of financial transactions still use Cobol, Edward Moya, analyst with the financial services company Oanda told Protocol. Cobol stands for "common business-oriented language," which was designed in the 1950s by Grace Hopper — more than a decade before the birth of the internet.

Why the big valuation bump for Zeta? It's not really surprising given so much pressure to "upgrade their antiquated systems," to get rid of "massive inefficiencies," Moya said.

  • That need led SoFi to buy Galileo, a banking infrastructure company, last year for $1.2 billion. SoFi is expected to go public soon via Chamath Palihapitiya's SPAC.
  • One of its main rivals, Marqeta, is set to go public next month, one of the most anticipated fintech IPOs this year.
  • Earlier this month, another banking software startup, Treasury Prime, announced another $20 million in funding in a series B round led by Deciens Capital and QED Investors.
  • Logan Allin, managing general partner of venture capital firm FinVC, described companies like Marqeta, SoFi/Galileo, Stripe and Plaid as the "fintech Lego blocks" that are leading long-term major changes in the financial services industry in the U.S. "You will see companies like Zeta emerge as fast followers in other markets," he told Protocol.

"This unicorn has got everyone's attention." The monster funding round naturally means a more intense spotlight on the Indian startup, Moya said. That's also partly because of Turakhia, Zeta's 41-year-old CEO, a legendary serial entrepreneur who started his first company at 18. Zeta's game plan is simple, he said: to "disrupt the stagnant landscape of banking tech."

— Ben Pimentel


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From Protocol | Fintech

Coinbase's big lobbying hire: The crypto marketplace named a Goldman exec as its chief policy officer.


  • "What it tells you about the currency or some stocks is that it's not liquid. If that thing can move around that much based on a nonlogical tweet, is that something you want to own?" — Rick Lear, founder of Lear Investment Management, discussing Elon Musk's influence on the crypto market.
  • "I'm definitely very happy that one of the biggest problems of blockchain will go away when proof of stake is complete. It's amazing." — Vitalik Buterin, inventor of Ethereum, on the project's shift to proof of stake, which could drastically cut Ethereum's energy use.
  • "I have deep concerns about the lack of transparency and accountability that is a hallmark of the SPAC process, and it appears that SPAC mergers are structured to ensure Wall Street insiders receive huge profits and retail investors pay the cost." — Rep. Maxine Waters chair of the House Financial Services committee at a hearing on SPACs, direct listings and IPOs.
  • "Since the inception of the CFPB consumer complaint portal a decade ago, complaints from consumers about credit reporting have outpaced complaints about any other consumer product or service." — House Financial Services committee staff memo on consumer credit in preparation for a hearing Tuesday.

3 Questions With...

Charles Delingpole, CEO, ComplyAdvantage

What fintech trend are you most excited about?

What's happening with the rapid increase in crypto and related digital currency services. In the last year or so, we have seen digital currencies go from relative obscurity to a mass market consumer phenomenon. Let's take non-fungible tokens. Three months ago, most consumers had never heard of NFTs. Now you have everyone from the American rapper Ja Rule to the Christie's auction house all participating in the NFT economy.

What trend are you most worried about?

Financial crime is the biggest trend that I worry about the most for obvious reasons. While fintech innovation is amazing and the benefits are many, the new services that are being launched are unfortunately ripe for criminal intrusion and potential manipulation. Many new services are often rolled out with anti-money laundering (AML) and risk detection as an afterthought. There is usually a decision to bring on a compliance team or team member when the service has reached enough scale. Unfortunately, without early AML and risk detection, there's always the possibility of onboarding a person or business entity with criminal intent.

What was your biggest professional blunder, and what did you learn from it?

My biggest professional blunders have always been hiring-related. As much as you can always try and hire the right people, do background checks; in the end people will always surprise you and it will be impossible to get the right candidate for the role every time.

Need to Know

  • Moov named a new CTO. The developer-focused banking fintech startup hired Joel Tosi, previously a vice president at Fiserv.
  • Plaid and Square partnered on ACH. The deal enables U.S. merchants to process ACH payments without needing to hold sensitive bank information.
  • ECB ripped banks for instant payments fees. Bank officials said the fees have to drop.
  • HSBC launched a multi-currency digital wallet. The bank is taking on upstarts like Wise with the service initially in the U.S., U.K. and SIngapore.
  • South Korea's central bank is preparing a digital currency. The bank is choosing a tech provider for a pilot program.

Deal Flow

  • Super grabbed $50 million. The insurance-tech startup, which offers subscription services that act like home warranty insurance, gets a series C led by Wells Fargo Strategic Capital.
  • Australia's Mx51 raised $25 million. Mastercard is among the investors in the spinout from Assembly Payments.
  • Square alums raised $12.75 million led by Sequoia. Their new venture, Found, helps self-employed people manage their businesses.
  • CleverCards got $12 million. The Irish B2B card payments startup also obtained a European Money Institution License through an acquisition.

Data Point

$36.6 billion

That was the April volume on Uniswap, a decentralized crypto exchange, compared with $110 billion on Coinbase.


Trusted since 2011, there are over 73M Wallets that have transacted nearly $1T in crypto.

Whether you want to trade, earn, custody, or access full-stack institutional solutions, is a market leader in retail and institutional crypto products.

Learn more

Thanks for reading — see you Friday.

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